Brad Jacobs stepped onto the dais at the New York Stock Exchange for his ninth time on Tuesday and led colleagues in chants during a celebration of XPO Logistics’ second spinoff in as many years.

By ringing the bell, XPO officially split its truck brokerage business into a new company known as RXO. While the veteran investor will serve as executive chairman of the LTL carrier and non-executive chairman of the brokerage, the day marked the end of Jacobs’ tenure as the chief executive of the logistics juggernaut he founded in 2011.

Jacobs handed daily operations of the brokerage to incoming RXO CEO Drew Wilkerson and the remaining pure-play LTL to incoming XPO Logistics CEO Mario Harik in this week’s spinoff. All three joined dozens of the companies’ other officials Tuesday for the culmination of the company’s run as a conglomerate. Over the past decade, XPO gobbled up more than a dozen different logistics firms, and it has since spun off specialized businesses with enough scale to generate their own returns to investors. 

Jacobs’ vision will live on at the spun-off companies: Wilkerson and Harik say they plan to follow long-term strategies guided by his priorities of tech integration and shareholder value. 

“I'm very confident that as a result of these strategic actions, we will serve customers better and we will be more responsive to changing marketplaces, that we will provide work environments that are very cohesive,” Jacobs told Transport Dive in an interview. “That's going to create tons of shareholder value as a result.”

RXO ‘will outperform the market,’ incoming CEO says

In addition to the management of day-to-day brokerage operations, Wilkerson has inherited Jacobs’ outspoken confidence. Wilkerson struck a bullish tone Monday during XPO’s quarterly earnings call the day before the spinoff, noting the brokerage is poised to succeed even amid declining freight demand.

“It doesn’t matter what happens in the market,” said Wilkerson, a C.H. Robinson veteran. “There is a lot of unknowns in 2023. We’re confident that we will outperform the market as a whole next year.”

As a separate company, RXO expects to grow volume YoY in Q4 and operate at a strong gross profit margin near, if “a hair behind,” the 19% it achieved last quarter under XPO. Gross margin per load could fall, too, due to a changing demand environment, but the brokerage’s “consistent outperformance proves that we can take share in any market,” Wilkerson said.

Jacobs' focus on digital during his time at XPO has helped RXO get off to an explosive start. RXO Connect, the brokerage's online platform, registered another 10,000 new carriers last quarter, Wilkerson told investors.

The company created or covered 81% of truck brokerage loads digitally in Q3, and while it anticipates a muted peak season, it is still seeing strong contractual bid activity and expects YoY load growth next quarter. 

To continue growing the percentage of digitally brokered loads, the RXO Drive app caters to carriers and their drivers, Wilkerson told Transport Dive. In addition to a carrier rewards program, the app guides drivers to the least expensive nearby fuel and displays the nearest Subway, which drivers voted as their favorite lunch option in a poll by the brokerage. 

“It's doing things like that, that are driver friendly and make their life easier,” Wilkerson said.

XPO plans for growth as pure-play LTL

Tech will continue to play a critical role at XPO, too, particularly under the leadership of Harik, its former CIO.

Jacobs’ third XPO hire, Harik rose to president of LTL after leading the carrier’s $3 billion tech strategy, which focused on infusing data analytics, machine learning, cloud computing and other capabilities into the company’s operations.

This year, XPO has added six new terminals to its nationwide network and expanded others, and it has seen business gains in those markets, Harik told investors.

“We opened up a terminal in Atlanta 6 months ago,” he said in the earnings call Monday, “and in the month of September, we have seen tonnage in the Atlanta market go up 38% on a year-on-year basis."

The business' sales force has also grown by 7% since the start of the year, and the company is on track to train 1,700 drivers by the end of the year.

XPO’s 82.8% adjusted operating ratio in Q3 caught Satish Jindel’s eye as “a very good number for these times.”

Jindel, president of SJ Consulting and a longtime LTL observer, said tech is critical for solving the “jigsaw puzzle” each shipment and trailer creates for LTL carriers. Harik’s ascension to CEO highlights the emphasis XPO places on tech, and it could cause a ripple effect in the rest of the segment, Jindel said.

“Picking Mario at the CEO is probably the most impressive thing for me, because I think he's the first person of the CIO background to be CEO of an LTL carrier,” Jindel said. “That should be a very interesting development.”

For Jacobs, ‘the hunt starts tomorrow’

While Jacobs will retain the board roles, the spinoff is a symbolic end of a decade-long chapter as a disruptor in the world of freight transportation.

“For RXO, it’s a birth — it’s the moment we’re born,” he said. “For XPO, it's a marking, a validation of the transfer of leadership from me to Mario. So it's a meaningful day.”

Since 2011, the company built a platform for shippers and carriers, then took market share through a series of acquisitions, most notably purchasing Con-way Inc. in 2015.

Contending that its stock was trading at a “conglomerate discount” compared to pure-play competitors in its different business segments, XPO spun off its European-centered contract logistics business, GXO, in August 2021. It sold its North American intermodal operation in March. The carrier also plans to divest the rest of its European business, although it provided no update this week on when.

“XPO’s size affords them this opportunity,” said Patrick Yorkey, commercial banker in middle market banking and specialized industries at Chase. “Both [XPO and RXO] will be large, dominant players after the separation.”

Jacobs posed for photos with colleagues Tuesday afternoon in front of an XPO truck below towering XPO and RXO banners hanging from the facade of the New York Stock Exchange building. The founder of United Waste Systems and United Rentals is already considering the next industry ripe for more shareholder value creation. 

He hasn’t decided on his next venture. 

“The hunt starts tomorrow,” Jacobs said.